Up-to-the-minute advice, information, resources, and, on occasion, commentary on federal and New Jersey state income taxes, and the various New Jersey property tax rebate programs, and insights and observations on tax policy and professional tax practice, by 40-year veteran tax professional Robert D Flach.

Thursday, January 31, 2008

ASK THE TAX PRO – ONE MO’ TIME

I couldn’t help it. Despite the fact that this question arrived after I had announced in several posts that I would not be answering any more ASK THE TAX PRO questions until after the tax season, I have decided to answer this “quickie”.

Q. Background info - I am a "Pizza Delivery Driver"

.I have recorded 25,000+ miles worth of un-reimbursed mileage. If I file them with documentation on my tax return will I actually get a "Refund" or is it just a "Deduction"? From everything I've read, within the past 2 hours of searching online, I've read that it is just a deduction.

.How do I get that back from my employer then?

A. Of course all you get is a deduction! Do you expect the United States Government to reimburse you for your business miles?

However, a deduction may lead to an increased refund. In your case 25,000+ business miles (that’s a lot of pizzas) at 48.5 cents per mile for 2007 would result in a deduction of over $12,000. Unfortunately as, I assume, a W-2 employee you must itemize in order to claim the deduction, and then reduce it by 2% of your Adjusted Gross Income. So you will not get a tax benefit for the full $12,125.

If your employer has an accountable plan for reimbursing employee business expenses, including business use of a personal car, then you would have to submit your mileage on a regular basis (i.e. weekly or monthly) to your employer on whatever form the plan calls for. If your employer does not reimburse for mileage then you are stuck.

3 comments:

Here is one I bet you have not come across before. I misstated my dependent daughter's SSby one digit. I corrected it immediately by calling the IRS, but they had already cut my rebate check and excluded the $300 for my daughter. We got a rebate check for $1200 for my husband and me, but when I called about the $300 rebate for my daughter based on her corrected SS number, the IRS told me that I would not receive anything for her. Period. There might be some chance to capture this $300 on my 2008 return, but the agent I spoke with was not sure and had not idea how that would work. Did this really cost me $300?

I am somewhat surprised that you will not be getting the $300.00 for your daughter (I assume she is under age 17) - since technically your original filing could not be processed without a correct Social Security number.

I did say somewhat - nothing at the IRS really surprises me anymore. And when it comes to the "stimulus" rebate it is anyone's guess.

If you do indeed qualify for the additional $300.00 for your daughter on your 2008 Form 1040 - that is she is under age 17 in 2008 as well - you will be able to get the $300.00 additional rebate then. It will be part of your 2008 refund, or it will reduce your 2008 balance due.

Before contacting me with questions about how a blog post relates to your specific situation, please be aware that I do not give free tax advice to non-clients by e-mail, comment response, or phone. So don't waste your time and mine.